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Hellaby's annual profit drops 30 per cent

NZ Newswire 24/08/2016Sophie Boot

Hellaby Holdings, the diversified investment group, has posted a 30 per cent fall in annual profit as restructuring under new chief executive Alan Clarke continues.

Net profit dropped to $19.6 million in the 12 months ended June 30, from $28.4m a year earlier, the company said on Thursday. Revenue rose 2 per cent to $795.5m.

The result was in line with a May forecast.

"FY 2016 was a difficult year and not one we expect to be repeated," Mr Clarke said.

"We do expect to see a stronger performance in FY 2017 as our new strategic plan takes effect and we focus on building scale and market share in our automotive and resource services groups."

The company has been overhauling its portfolio and investment strategy under Mr Clarke, who took over the reins last November.

In June, Hellaby sold its equipment group to a private equity fund for $81m and bought maintenance and engineering contractor TBS Group for $45m plus $6m of earn-outs. Neither transaction was recognised in the results.

Hellaby said the result reflected volatility in the oil and gas sector on its resource services group, and decreasing sales from the footwear group.

The company has been trying to sell the footwear division, but will now appoint specialist retail consultants to restructure the business, which Hellaby expects will improve the unit from 2018.

"Continuing volatility in the oil and gas sector is impacting on our clients in this industry and we expect uncertainty and depressed earnings in contract resources' international businesses to continue in the near term," Mr Clarke said.

"Management are focused on generating more stable earnings streams to balance our high margin but more volatile specialist refinery shutdown work."

The shares last traded at $2.90 and have fallen 1.4 per cent this year.